Europe's “zero emission” target fuel vehicle ban may now have a five-year buffer period

The Zhitong Finance App notes that under strong pressure from some of the EU's largest automobile producers, the EU is considering postponing the implementation of an effective ban on internal combustion engines for five years.

The European Commission is due to announce next week its rule revisions aimed at moving the automotive industry away from fossil fuels. Several governments and car manufacturers from Italy to Poland say the current plan to transition from existing technology is too aggressive and could kill one of the region's core industries.

According to people familiar with the matter, the committee's strategy is to allow the use of internal combustion engines to be extended by five years to 2040 in plug-in hybrids and extended-range electric vehicles. The condition is that these vehicles will use advanced biofuels and so-called e-fuels (manufactured using captured carbon dioxide and renewable electricity) and use green steel in the manufacturing process.

People familiar with the matter said that according to the exact parameters of the proposal, such a design would allow the EU to still aim to achieve zero emissions from new passenger cars by 2035. It will also respond to the concerns of several car and parts producers, which are calling for the use of clean technology other than pure electric vehicles after that date.

People familiar with the matter cautioned that discussions within the committee are continuing, and details are still subject to change.

While automakers will win more time to switch to all-electric vehicles, environmental groups are concerned that the revisions will create new holes, damage Europe's climate ambitions, and could leave the region's major automakers further behind China in the battery-powered road traffic race.

According to people familiar with the matter who requested anonymity due to ongoing discussions, the proportion of plug-in hybrids and extended-range electric vehicles allowed to be sold in the European market after 2035 has yet to be determined. They said that key technical details on e-fuels and advanced biofuels are also still being finalized.

Although e-fuels are theoretically climate neutral, they are expensive and the technology is in its early stages. The emission reduction benefits of biofuels and the pressure they put on land originally used for food production are also hotly debated.

The package, which is due to be announced next week, will also delay plans to tighten how emissions are calculated for plug-in hybrid vehicles. The Committee had considered moving to a system that measured actual pollution rather than using current indicators based on laboratory assumptions that significantly underestimate actual emissions.

The automotive policy package will be accompanied by a proposal to increase the share of electric vehicles in the corporate fleet, as well as changes to emissions rules for heavy vehicles.